The Indian rupee opened 4 paise stronger against the US dollar on Monday, in comparison to its previous close of 85.54 on Friday. This slight appreciation comes amid various global and domestic economic factors influencing the currency markets.
Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, provided insights into the day's trading range and hedging strategies. According to him, the rupee is expected to trade in a range of 85.25 to 85.75.
The rupee remains in a consolidation mode with a broad range of 85-86, with the market awaiting an event to change the range. The opening was stronger despite Asian currencies being a tad weaker from Friday's closing after US President Donald Trump's announcement of new tariffs on steel and aluminium.
"Exporters need to hedge near 85.70 to 85.75. Importers need to wait for hedging purposes," he advised.
Additionally, the US dollar softened on Monday as the dollar index fell to 99.18 levels, giving back some gains as the market weighed the outlook of Trump's tariff policies and their potential to restrict growth and increase inflation. The US currency has been whip-sawed for weeks by Trump's off-and-on trade war, falling when a flare-up in tensions stokes worries of a potential US recession.
"On Friday the Indian economy grew by 7.4% for March, taking the full-year growth to 6.5%, a healthy figure if you take the cases of other comparable/developed economies," added Bhansali.
The euro rose to 1.3495, while the Great Britain Pound was at 1.3495 and the Japanese Yen was at 143.49. Asian currencies were weaker, with the Chinese Yuan at 7.2135, the Indonesian Rupiah at 16,327 and the South Korean Won at 1,380.
Crude rebounded more than a dollar at $64.27 per barrel on Monday after OPEC+ decided to increase output in July by the same amount as it did in the earlier months in line with the market expectations.
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